“Users will have 90 days to reduce and close their positions for these products. Users will be able to top-up margin balances to prevent margin calls and liquidations, but they will not be able to increase or open new positions.”
This latest move comes after a report by the Financial Action Task Force (FATF) on South africa’s measures to combat money laundering and terrorst financing(ML/TF).
According to the report:
“South Africa is exposed to the laundering of domestic crime proceeds and foreign crime proceeds from the region. It is also exposed to terrorism financing risks associated with foreign terrorism, foreign terrorist fighters (FTFs), and potential domestic terrorism.
While authorities carry out some successful money laundering investigations, the proactive identification and investigation of laundering networks and professional enablers is not really occurring.
The report further reveals the lack of clear ML and TF assessment in South Africa by saying:
South Africa cannot show it has identified and assessed the ML and TF risks emerging from VA activities (crypto asset activities) and the activities or operations of VASPs (CASPs) and has taken measures to mitigate such risks.
However, it does have a certain appreciation of the risks of the VASP sector, based on a mapping exercise of the current landscape of VASPs in South Africa, and the voluntarily involvement of the major market participants under the AML/CFT regime.
Furthermore, attention is given to VASPs in the ML NRA as far as they constitute threats in the banking sector. As of the onsite, VASPs were not subject to the AML/CFT regime (beyond the reporting obligation, see c.15.8) and therefore, had no obligations to identify, assess, manage, and mitigate their ML and TF risks. Certain VASPs mitigate some of their ML/TF risks by voluntarily applying the principles of the FIC Act to their client base.”
This move by Binance is not surprising following the recent announcement to expand its know-your-customer requirements where all users on the Binance exchange are now required to complete Level 2 verification before using the platform.